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In the town of Waselville it is currently illegal to sell marijuana. However, "Ducky" has been providing product in the town for years. He is effectively immune to any prosecution (mostly because the city council, the police chief, and local judge are all his customers). Ducky faces the following INVERSE demand function:

P=1000-sQ

Where P is the price, and Q is the quantity sold. Ducky has two costs: he pays $200 a unit for his product and a fixed cost of $1000 for a protection fee to a Canadian mobster.

Starting the profit equation or the condition that determines the quantity for a firm, what is the quantity that "Ducky" provides to the town?

Business Economics, Economics

  • Category:- Business Economics
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